Boy, that bailout bill really helped, didn't it? The Dow is now below 10,000 at the time of this writing. The rest of the world isn't faring much better.

But don't they say that every cloud has a silver lining, or it is an ill wind that blows no good?

Well, falling oil prices would be the little ray of sunshine in our black cloud of falling stocks.

Oil prices fall below $90 amid financial crisis worries: 

Oil prices briefly fell to an eight-month low below $90 a barrel Monday on speculation that the spreading financial crisis will exacerbate a global economic slowdown and cut demand for crude oil.

Significant gains by the U.S. dollar against the euro also contributed to slumping oil prices.

By midafternoon in Europe, light, sweet crude for November delivery was down $2.68 to $91.20 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, the price fell as low as $88.89 a barrel.

Oil prices have tumbled nearly 40% since peaking in July. The Nymex front-month contract last traded this low in early February.

At least lower oil prices will help Americans with heating costs* and filling their gas tanks. That is the only good thing I can say about the falling markets right now.

But, since we are so dependent on middle east oil, don't expect this downward trend to continue back to "good ole days" prices. After all, they do control the supply side of supply and demand. More from USAToday,

Iranian Oil Minister Gholam Hossien Nozari said Saturday that it would be "unsuitable" for both producers and consumers for oil to dip below $100 a barrel. He called on fellow OPEC members not to pump too much oil and avoid a drop in prices.

"OPEC has signaled it may defend $80," Shum said. "There's uncertainty over what OPEC may do."

Need another reason to drill domestically and adopt an "All of the Above"** energy policy? Our economy would not be in the mess it is right now if we had adopted it years ago.

*Most will not benefit this winter from falling oil prices when it comes to heating. JSOnline: Government warns of sharp increase in winter heating costs, especially for homes using oil 

**I do not favor all of the All of the Above. So far, solar, wind, and ethanol are just too expensive and inefficient to be practical. 

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Last week, I was at US Bank; a CD had matured. I asked the banker, does US Bank have money to lend? Could I get a loan if I needed one? He said, Yes, it was no problem. (I have a good credit score.) 

A local car dealer last week said they had money for financing too.

So we see, not every bank is short on available cash. And now this: Wells Fargo acquiring Wachovia for $15.1 billion! (My emphasis)

 In an abrupt change, Wachovia said Friday it agreed to be acquired by San Francisco-based Wells Fargo & Co. in a $15.1 billion all-stock deal that trumps Citigroup's plan to acquire Wachovia's banking operations and avoids government assistance.

The Citigroup deal would have been done with the help of the Federal Deposit Insurance Corp., but the Wells Fargo deal for Wachovia will be done without it. Shares of Wachovia and Wells rose in morning trading, while Citigroup shares fell.

Today, all eyes are on the House, seeing if the bailout bill passes there. I am hoping it doesn't since it contains too much pork and not enough reform. Loads of Pork, Little Accountability in Senate Bailout Bill: Will the House Balk?

 

The House rejected the original bill on Monday but the revised bill contains a lot of "sweeteners" designed to garner enough votes, including $100 billion in tax relief, a widening of the FDIC insurance cap to $250,000 and aid to rural schools.

But the Senate bill is also laden with pork, including:

• $223M for Alaskan fisherman
• $192M for rum producers in Puerto Rico and the Virgin Islands
• $128M for auto racing
• $33M for companies operating in American Samoa
• $10M for film & TV production
• $6M for producers of wooden arrows

In the meantime, the private market is working, buying up bargains and expanding their market share. 

UPDATE: New development. Wells and Citi are fighting over who gets to buy Wachovia! Wells Fargo, Citigroup in tug of war over Wachovia 

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The Senate bailout plan passed Tuesday night. The bill went from the 113 page house version to 450-something pages! How could the Senators even read 450 pages?

This travesty of a bailout bill epitomizes everything wrong with Washington: Dire problem...Don't fix problem...Load on the pork...Make problem worse.

What is in there? I heard some tax breaks. The oddest was for children's wooden arrow manufacturers. I call that the good part because at least it probably does not amount to much money.

This bill is probably everything Congressman Paul Ryan feared. Certainly the Senate version did not get that month long, or even a week long committee meeting process that Congressman Jim Sensenbrenner wanted. Instead they rushed this pig through.

Michelle Malkin posted 3 pieces Tuesday: Kill the baliout: The vote draws near, and The Senate votes, and Read the Senate bailout bill here, which included the bill's language. They give a flavor of the night and bill. Nays include: Brownback, Bunning, Dole, DeMint, Feingold, Inhofe, Johnson, Sanders, Sessions, Shelby, to name a few. The votes are recorded at end of Malkin's The Senate votes posting. (I will have to thank Feingold, which does not happen very often.)

Correction: Hold the phone, the following did not make it into the final bill: The bill included an amendment from Senator Sanders for a 10% income tax surcharge on incomes above $500,000, $1million for couples. That will hurt some small business owners.

It goes back to the House Thursday, with a vote possibly on Friday. If you are a praying person, pray the House would have wisdom.

The most important piece, the repeal of the Community Reinvestment Act I think is still sadly lacking. Without that piece of the pie, I think we are doomed to just keep repeating the cycle.

Seems that additional 340-some pages were pure lard.

Sickening. 

We have a model that worked pretty well when the government stepped in with the Savings and Loans. Why didn't they do that?  What about the Republican model of lending institutions purchasing insurance? Another possibility comes from frugal Dave Ramsey.

Post Script bright spot: "The bill also reaffirms the Securities and Exchange Commission's authority to suspend so-called mark-to-market accounting, an issue that gained surprising traction among lawmakers looking for less costly alternatives to the Bush plan. The practice, adopted in the aftermath of the savings-and-loan collapse in the 1980s, pegs the value of assets to their current market price, rather than the price paid for them.'

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I heard both Congressmen Paul Ryan and Jim Sensenbrenner interviewed on Jay Weber's radio show this morning. (Hour 4 Part 2). Since I trust the opinion of both of these men, I was curious as to why Ryan voted YES and Sensenbrenner NO on the latest bailout bill. 

First Congressman Ryan, who does have a degree in economics. The following are some notes I took from the interview--they are not direct quotes. Listen to the podcast if you can.

Ryan said the bill yesterday was the Paulson plan with quite a bit of tweaks.

The original Paulson bill was 3 pages: Give me a blank checkbook with $700billion.

We wrote a [Republican] alternative. Ours said, Let's make the firms buy insurance.

We rewrote the bill, added stock options--warrants to taxpayers, so the taxpayer is first in line to get money back (if there are profits--that means ACORN would not be getting funding as the orig. Paulson bill stated.) Executives won't get a Golden Parachute.

This bill was $350 billion: $250b immediately and $100b later. An additional $350b would need to be voted on in the future.  

Over the weekend, credit markets went crazy. The problem is not just on Wall Street. Credit markets are shutting down. [That means cash flow for payrolls is unavailable.] There is a fear of recession.

"I'm now sincerely worried this could lead to recession."

Jay Weber: Can we move slowly or do we need to move quickly?

Ryan: Tax money goes out the door either way, this way (bailout) or from FDIC (if banks fail.) Paulson mishandled this so badly.  We added 107 pages to his bill. 

I have never seen things like this [credit freezing up]--ever. Businesses won't be able to cash flow payrolls.

Weber: There is a deep distrust of Congress.

Ryan: 2,300 calls [to my office] almost all against the bailout. [That is changing a little now.] We have to corral Wall Street so it doesn't spill to Main Street.

Weber: Why aren't Republicans hammering this?

Ryan: I am. Since 2002 I have voted against Freddie and Fannie every time.

I think Paul Ryan voted for this measure because he is genuinely worried about our economy shutting down. He knows that if businesses cannot get credit to meet their payrolls, that means workers do not get paid. With many Americans just a paycheck away from being broke, we cannot afford to let that happen. Businesses also use credit to purchase supplies and equipment for future production.

Then it was Congressman Jim Sensenbrenner's turn:

Paulson [Barney Frank] plan fatally flawed from the beginning. That money all came from taxpayers.

The word was, $700billion would not be enough.

America can't afford this. We are wealthy, but there is a limit. 

All of this is inflationary. Interest rates will shoot up. [Remember] 20% prime rates during Carter? 

We should go back to the regular order [of crafting legislation] with committee meetings, rather than Paulson saying we have to do this.

Weber: We're racing against the clock.

Sensenbrenner: When markets opened [today] they were up 200, so hopefully the markets have calmed down.

Paulson is pushing for now. It bailed out the people who caused the problem.

I'm prepared to go back when Pelosi calls us back.

This is a case of Congress serving the people. 

Weber: What angers people is Frank and Dodd in charge of the fix. Is there any mechanism to say when you failed the people, get off the committee!

Sensenbrenner: The Community Reinvestment Act was a significant factor [to what is going on.] 

The process worked yesterday. The speeches like from Pelosi need to stop. She also knew there were not the votes to pass. Why did she bring the bill to the floor? [To fix blame on the Republicans]

Weber: Would you change the Community Reinvestment Act?

Sensenbrenner: Repeal of that law should be in the new package now.

The Security and Exchange Commission dropped the ball--enforcement was not vigorous. 

The Justice Department should investigate if any fraud was committed. [Imprisonment would serve as a deterrent.]

So there you have the Yea and the Nay. Where is Solomon when you need him? 

Conservatives would hope the next version of the bailout bill would be better for taxpayers, that it keeps money from ACORN and repeals the Community Reinvestment Act. With this crew I don't have much hope.

My fear is that the next version will included ACORN funding again or worse. The Democrats will vote for it, and President Bush, who is really over a barrel here, will have to sign it.

Calls from Americans running 500 against, to 1 in favor, of the bailout might be the only thing that saving us from an UGLY pig of a bill.

Post Script: Along the lines of Sensenbrenner's request that they craft this bill carefully, 165 Economists rip bailout plan:

The economists say they are well aware of the current financial situation and agree there's a need for bold action but ask Congress "not to rush."

They urge lawmakers to hold appropriate hearings and "to carefully consider the right course of action." 

Right now the market is up 307 points from yesterday's close. You can check anytime on USAToday. (If you leave it open, it automatically refreshes.) 

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Remember Rep. Nancy Pelosi's Remarks Upon Becoming Speaker of the House two years ago? (Emphasis mine) 

I accept this gavel in the spirit of partnership, not partisanship, and I look forward to working...

I look forward to working with you, Mr. Boehner, and the Republicans in the Congress, for the good of the American people.

... and the American people told us they expected us to work together for fiscal responsibility, with the highest ethical standard and with civility and bipartisanship.

... After years of historic deficits, this 110th Congress will commit itself to a higher standard: Pay as you go; no new deficit spending.

... Our new America will provide unlimited opportunity for future generations, not burden them with mountains of debt.

... My colleagues elected me to be speaker of the House. The entire House. Respectful of division of our founders, the expectations of our people and the great challenges that we face, we have an obligation to reach beyond partisanship to work for all America.

... Let us stand together to move our country forward, seeking common ground for the common good.

Did her performance yesterday live up to her promise? Blaming Bush for all of this? (There is plenty of blame to go around. If our economy is in such danger, and I think it could be, is this the time for finger pointing or "seeking common ground for the common good.")

Pelosi let 16 Democrat Congressmen in tight races off the hook--they could vote NO. Obama campaign co-chair Jessie Jackson Jr., Democrat from Illinois, voted NO.

If Speaker Nancy Pelosi was so sure this bill needed to pass, why did she poison the deal with her rant and not insist her own party support it? Was she hoping it would fail so they could get the ACORN funding back in? Who knows.

I think it all comes down to a matter of trust. Do you trust this Congress to come up with an acceptable solution?  

About this time 2 years ago, before the majority shifted to the Democrats, the Congress' approval rating was 25%. Last year it was 11%. In July it was 9%: "The overall national approval rating is at 9 percent. The first time in history that the rating has fallen to a single digit. ...So you see, history can be made. All it took was some hard work and bipartisanship."

Rep. Jim Sensenbrenner said, "Now is not the time to fix the blame, it is time to fix the problem."  I pray they will be able to do just that before credit totally freezes up and businesses can't make payroll.

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Our present market woes and the Freddie/Fannie mess did not come out of nowhere. They are not George Bush's fault. They started a  l-o-n-g  time before either Bush.  Watching the house burn down: What caused our economic crisis? gives a good run down of the chain of events leading up to this crisis.

First thing this morning, I checked to see if Rep. Paul Ryan and Jim Sensenbrenner were on board with the bailout bill. If so, then I felt it might shore up the market with the least harm. Thankfully, ACORN funding has been removed from the present version.

Rep. Paul Ryan doesn't like the bail out but agrees we are painted into a corner and must do something. Jim Sensenbrenner it seems will not support it at all. GOPUSA says it is still a Train Wreck.

The House Bailout failed to pass 228-205. Seems Pelosi gave a pre-vote speech that did not warm the hearts of Republicans by blaming Bush for all of this. Democrats were not enthusiastic either. Democrats against: 95, Republican NOs: 133. Wisconsin Representatives voting NO: Jim Sensenbrenner - R, Tom Petri - R, and Steve Kagen - D.

Roughly 4/5ths of Americans do not favor a bailout, which is why democrats were hesitant to sign on. Some want the free market work as in Citibank buying Wachovia today.

The market closed at 777 points down today. The price of oil went down to $96/barrel, gold closed up about $8 at $898/oz. One thing saving our bacon is that world wide markets are jittery too. If you are a foreign investor, who do you trust with your money? Don't know how long foreign investors will stay with us though.

I have no idea what is the right thing to do regarding the bailout bill. I think Ryan voted for because he knows this could go way south.

At the very least, it is time to put an end to no money down and little money down mortgages!

Vicki McKenna talked today on her radio show about how she* is in the process of buying a home. When she first started looking months ago, she was told she needed 20% down. This is consistent with what a Realtor friend told me--that people were getting mortgages if they had 21% to put down. But now Vicki was told she could get a mortgage for 3% down, if she did it before the end of the year!

I believe the little or no money down policy of the Community Reinvestment Act started us down this fiscally irresponsible path. Without the cushion of 20% down, for those times when home values falter, these no/little money down loans became upside down.

So the American taxpayer is asked to bailout out the lenders, and Congress is drilling more holes in the boat by not reforming down payment requirements? Pretty typical.

PS Did you see that the House passed a $25 billion bailout for automakers?

*CORRECTION: It was not Vicki herself, but someone in her building. The point remains the same regardless who got the loan. 

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There is lots of chatter today about how Sen. John McCain squashed the soon-to-pass bail out plan. (So much for the Dems. calling him Bush 3)**

Hmm, the Democrats are in the majority, why don't they just pass it on their own?*

Because they don't have the votes in their own party.

Truth is, the bail out bill the media said was near passing, was NOT anywhere near approval. House Republicans were not consulted on the Paulson bail out bill.

In addition, Senator Lindsey Graham was on Fox last night and explained that part of the bail out money would go to ACORN! From Hot Air:

House Republicans refused to support the Henry Paulson/Chris Dodd compromise bailout plan yesterday afternoon, even after the New York Times reported that Treasury Secretary Henry Paulson got down on one knee to beg Nancy Pelosi to compromise.  One of the sticking points, as Senator Lindsey Graham explained later, wasn’t a lack of begging but a poison pill that would push 20% of all profits from the bailout into the Housing Trust Fund — a boondoggle that Democrats in Congress has used to fund political-action groups like ACORN and the National Council of La Raza

Would you want that to pass? 

Most Americans are not in favor of a bail out. Most Republicans do not favor a bail out. Newt Gingrich has not favored a bail out to save our economy. (Emphasis mine) 

Newt Gingrich:  Well, the last time we were promised they were going to save us, it was $300 billion; it was a housing bill.  And what liberal Democrats in Congress did, for example, was add $500 million a year for a left-wing activist group called Acorn.  Now, I can’t imagine why we’d want the taxpayer to give $500 million a year to a left-wing activist group, but it’s in the bill which the Bush administration signed and that was only back in July and that was going to solve everything.  That was $300 billion ago.

Now we have a brand-new, liberal Democrats, many of whom, for example, Chris Dodd, was the largest single recipient of money from Fannie Mae and Freddie Mac and he is the chairman of the Banking Committee.  So the guy who got the most money is now going to write a bill to give taxpayers money to the people who gave him money.  Somehow, I am not reassured.

The House GOP (Republicans) have presented a plan of their own. It is more of a Work Out than Bail Out. Gingrich also favors a Work Out that would include borrowing at 2% not bailing.

I may just be a Home Economist, but I know we need to do something. If the average American was in better financial shape, not carrying around $8,000 debt on their credit card and not one paycheck away from financial disaster, I might be inclined to just tough it out.  

Gingrich recommended that Republican leaders like Boehner, DeMint, Shelby, and McCain meet to put together a proposal Americans will support. Then the people will put the pressure on the Democrats in Congress to pass it, much like public pressured Congress to drill for domestic oil. But since Harry Reid just stuck a ban on domestic oil shale drilling onto an appropriations bill, while this crisis is going on, so much for listening to the will of the people and doing what this country needs.

Heaven help us. I mean that literally.

Read more: Market Rescue Dos and Don'ts  from the Heritage Foundation

*Observation courtesy of Nick Reed interjecting on the Jay Weber show this morning. 

**Observation by a caller on Rush's show today. (The car radio does make running errands more tolerable!) 

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Yup, it is true. Former President Bill Clinton appeared on Good Morning America this morning and defended John McCain. (Politics makes strange bedfellows!)

ABC News' Nitya Venkataraman Reports: Former President Bill Clinton defended Sen. John McCain's request to delay the first presidential debate, saying McCain did it in "good faith" and pushed organizers to reserve time for economy talk during the debate if the Friday plans move forward.

... 

"We know he didn't do it because he's afraid because Sen. McCain wanted more debates," Clinton said, adding that he was "encouraged" by the joint statement from McCain and Sen. Barack Obama.

Clinton also commented on the Democrat's accusation that this problem came out of nowhere--we had nothing to do with this. He admitted some responsibility in this mess lies with the Democrats in Congress. (About half way through the clip)

Well... ...the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put in some standards and tighten up a little with Fannie Mae and Freddie Mac. [He also blamed the Up Tick rule.]

I really hope the Congress acts in good faith and not in their typical political way, as in the NO Drill Bill. When Sen. Obama originally stated that he would not come, that "If you need me, call me." if he was needed, I wondered how that would have gone over with the Democrats if Pres. Bush had done that with Hurricane Katrina.

GOPUSA's piece, Bailing out the Bailout, talks about Sen. Reid's flip flop on McCain's presence and what some conservatives hope McCain can do, 

...Until McCain's announcement, Senate Majority Leader Harry Reid seemed inclined to support the $700 billion bailout bill -- provided Democrats could lard it with their own goodies -- but only if McCain (and other Republicans) would support the package and provide the Dems with political cover.

"I got some good news in the last hour or so ... it appears that Sen. McCain is going to come out for this," Reid announced Tuesday evening.

...

Reid's office promptly released a statement that said, "We need leadership; not a campaign photo-op." So the bailout is worth spending $700 billion of other people's money -- but not worth McCain flying to Washington to broker a doable deal? Get the feeling Reid is completely out of touch?

Now, what if McCain could reduce the size of the bailout? (That is a tall order, but hope springs eternal with me.)

If, however, McCain can broker a more fiscally responsible plan -- read one with a price tag about half of the original's size or less, and with a cap on executive pay -- he just might be able to broker a deal that can pass muster.

McCain is taking a huge chance here. Even just going to Washington to vote on this measure is a risk. One has to wonder if Obama hoped he could duck the whole thing by not going to the Senate to vote at all--a variation on voting, "Present."

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The Democrats present the Trojan Drilling Bill, the stock market is in major jitters, investors look for safe places to put their money. Hence oil, gold/silver/precious metals go up. Pretty simple.

With the Democrat's no-drill oil bill, prohibiting drilling in most areas, there will be little change in our domestic oil supply. If we don't get a real Drill Here bill, we will be dependent on foreign oil for years and paying higher prices. It is supply and demand...the price will go up.

Anyone wondering if the Democrats are trying to create such an oil price crisis that the government must come in and take that industry over too? I am hard pressed to explain the Democrat's stance any other way.

The other factor involved in precious metal and oil price increases is the fall of the dollar. It had been improving since about July. But the Freddie and Fannie / financials bail outs cause the United States to expand the money supply. That is inflationary, resulting in the value of the individual dollar to fall. Again, it is supply and demand.

From the Financial Times: The Short View: Oil and the Dollar: 

By late morning in New York on Monday, the price of oil had climbed by 20 per cent in barely five days and scarcely anyone had noticed. Then it went into overdrive, hitting $130 at one point before settling at $120.92. Last Tuesday, it traded at $90.51 – a swing of 44 per cent from bottom to top.

This had little to do with the supply of and demand for oil and everything to do with the fallout from the “Paulson plan” – the proposal to risk $700bn of US public money in a bail-out of toxic securities held by banks.

Oil rose as doubts surfaced about the plan.

When people are nervous, they look for tangible products to invest in. 

A key variable is the dollar. So far, it has fallen in response to the possible huge rise in the US deficit. The markets seem to have gone a step further and assumed that this step will be be inflationary and cause financial assets to lose value.

In that situation, the thing to do was to head for real assets, led by oil, although other commodities, led by silver, also had a strong day. Unfortunately for the Paulson plan, the inverse relationship between oil and the dollar is one of the few financial constants to have survived the past few days.

I heard this morning that oil settled down to about $108/barrel in Asia. People are nervous worldwide. The US money supply is expanded beyond thin.

The last thing we need is another check writing spree by the government in the form of a Democrat 2nd $50billion stimulus package or a $1,000 energy rebate based on a windfall profit tax to oil companies as Obama is touting. (That tax would be passed onto consumers, making oil prices higher.)

Even the Federal Government can only print so much money if it is to be worth more than the paper it is printed on! 

Brookfield District 7 Info meeting, Wed., Sept. 24, 2-3pm or 6:30-7:30pm City Clerk Kris Schmidt will be in attendance to answer questions or concerns regarding recent news about the Van Hollen lawsuit against the state elections authority.

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It has happened again. Tainted Chinese made baby formula* has caused 3 infant deaths in that country. More deaths will probably follow since 1,253 babies are already sick, and at least 10,000 infants have been exposed. (In 2004, 13 babies died from "drinking fake milk powder.")

Now the Chinese government is cracking down. China arrests 12 in milk scandal:

Suppliers are believed to have added melamine, a banned chemical normally used in plastics, to watered-down milk in order to make it appear higher in protein.

The additive is blamed for causing severe renal problems and kidney stones.

...Tests have shown that 69 batches of formula from 22 companies contained the banned substance.

If that chemical sounds familiar, it is because melamine was the same culprit in last year's dog food recall that caused thousands of American pets to die. It is not included by mistake; the toxic chemical is added because it is cheaper than producing the product properly. In other words, they do it to cheat. (I don't believe the Chinese have the same ethical prohibitions to cheating that Americans do.)

China's track record on producing safe products is shaky at best. 

It has also raised questions about China's ability to police its food production industries after a series of health scares - and fatalities - in recent years.

These have ranged from the contamination of seafood to toothpaste and, last year, to pet food exported to the US.

Not only are food products in question, but the lead paint on toys scandal last year makes me doubt their veracity on other fronts too.

My advice is to start reading labels--including mainstream American company brands. When you start, you may be as surprised as a family member was to see American Co. juice boxes marked, "Made in China." 

The tilapia I so enjoyed was also marked, "Made in China." Since tilapia is pond raised, I had to wonder, what are the Chinese feeding them? Do I trust them to do the right thing? No. I suddenly lost my appetite.

On non-food products with a more personal connection, such as sun screen, mouth wash, baby bottles and pacifiers, make-up, medications, toddler toys--anything that goes in the mouth or on the skin--I would avoid "Made in China" or made in the 2nd or 3rd world too. (Reputable countries such as Canada, Germany, UK, France, etc. would be probably be OK.)

It is one thing to purchase a pair of "Made in China" shoes that fall apart in a month, quite another to give a toddler a toy with lead paint! I don't mean to suggest that the Chinese are the only people motivated by greed, but your chances of getting what you pay for are higher when you buy "Made in USA."

Not only will you be protecting your family from possible harm by buying American, but you will also be helping our own economy. 

*OK, here is my chance to pitch breastfeeding, which is by far the best method for feeding an infant. La Leche League helps women worldwide to learn how to breastfeed their infants. Nursing provides better nutrition and immune defense to infants, be they in the USA or 3rd world country--and no worries of tainted, improperly, or inadequately configured formulas.

Brookfield District 7 Info meeting, Wed., Sept. 24, 2-3 or 6:30-7:30pm

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Brookfield7, Fairly Conservative, Betterbrookfield, Mark Levin,  Vicki Mckenna

Have you noticed that the mood of the country has changed regarding energy?

Last year, THE solution was all about growing our own energy by using ethanol. The emphasis was on reducing our carbon footprint and dependence on foreign oil, regardless of the cost.

But rising food prices and the fact that ethanol was a boondoggle (using as much energy as it supplied) caused ethanol's reign to slip from political popularity.

Then came Newt with his Drill Here.Drill Now.Pay Less. campaign. While I am surprised that he never did get those 3 million petition signers, he certainly started the conversation that we must start producing more oil domestically.

It was a conversation the President and House Republicans were willing to listen to. Nancy Pelosi and the House Democrats, however, were not. In fact, she shut down the House for 5 weeks!

During that 5 weeks off, around 130 House Republicans kept the heat on the discussion in the House. See YouTube

Also during the summer, the polls started showing that 67% of Americans favored domestic drilling.

John McCain responded to that fact by embracing offshore drilling. Certainly his picking Palin indicates he is looking at domestic oil and increasing natural gas. The Republican ticket has an "All of the above" approach. (Oil, clean coal, natural gas, tidal, hydro, hydrogen, geo-thermal, nuclear, wind, solar, etc.)

Barack Obama wouldn't go that far, but did promote getting off foreign oil dependence by increasing clean coal, natural gas, and safe nuclear as additions to the usual wind, solar, etc.

But while all this new domestic energy posturing was going on, Pelosi and the House Democrats were not available until this week. On Monday:

"House Majority Leader Steny Hoyer (D-Md.) said Monday morning that the newest Democratic energy bill will be brought to the floor under normal rules and will be subject to a vote on a Republican alternative that is likely to call for even more drilling than Democrats are prepared to swallow.

So finally, she and the House Democrats are willing to allow a vote on drilling!

"Pelosi miscalculated in her heavy-handed tactics before the recess.  She attempted to push through her own plan under suspension of the rules, a tactic she decried in 2006, which kept Republicans from offering an alternative.  When it failed, she adjourned Congress, hoping to put off the debate until after the conventions … and her book tour.

"Instead of regrouping, the Democrats found themselves routed by an angry electorate and motivated Republicans.  The House Oil Party kept the issue in the media eye, at least to an extent, but high gas prices kept it on the minds of voters while Democrats took their summer vacation.  It was as poor a political calculation seen in recent years, and the sudden shift in generic Congressional ballots and in party identification has been the result.

"Pelosi and Harry Reid may have finally figured out that they could lose this election on energy policy.  Will this be enough to stanch the bleeding? (My emphasis)

This vote would have never happened without public pressure. We tend to forget that fact. But don't jump for joy just yet.

The next hurdle will be, what kind of energy bill gets passed? Will it be a real energy bill that truly increases drilling opportunities and new energy sources? Or will it be just all show and no go? as a token attempt by Democrat Congressmen and Senators up for reelection to appear sympathetic to energy prices?

But House Republicans called the Democrats' proposals "gimmicks," and instead have insisted on a stand-alone vote on oil drilling.

"Speaker Pelosi's so-called 'energy' bill will do nothing to help our energy crisis," said Rep. Michele Bachmann, Minnesota Republican. "It will multiply red tape and make it almost impossible to lower already skyrocketing oil costs." (My emphasis)

Stay tuned! 

Please, comment content should relate to the subject of the post.

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Brookfield7, Fairly Conservative, Betterbrookfield, Mark Levin,  Vicki Mckenna

We rekindled our love affair with road trip vacations in 2001 when our son was finally old enough to endure 3 days of driving at a time, and we were able to afford more dependable transportation. Instead of our usual 2 hour drive to some favorite State Park for 2 weeks of camping, we graduated to visiting various National Parks out west. It has been great.

Because of our road trip habit, I've payed attention to gas prices. Beginning in 2001, when prices spiked in late spring, I would wring my hands with everyone else and worry how high they would go by August (the time of our departure.) But it seemed every year, gas prices went down about 40 - 50 cents/gal by the time we hit the road. (Good reason to plan your driving vacation late in the summer.) Photo shows $3.79/gal on July 25, 2008 at Speedway on Greenfield and Sunny Slope Road, that is about .50 cents lower than earlier highs this summer. 

Experience taught me to not fret too much about what would prices be by the end of summer? I would assure myself the price would come down later in the summer, and they did. Unfortunately, the lower price of August was usually .25 to .50 cents/gal higher than the year before! 

I checked my travel journal for some past August price examples*. You can see the prices increases nearly every year:  2003 - $1.59/gal, 2004 - $1.83 to $1.93/gal, 2005 - $2.53 to $3.47/gal (California' price), 2006 - $2.99 to $3.19/gal, 2007 - $2.85 - $3.09. Notice the prices in 2007 were cheaper than 2006, but that was the exception to the norm.

The AAA agent told me Monday, the price this summer is $1.19 higher (nationwide) than last year's gas prices. That is a higher jump from years past. Some other market forces are at work.

USA Today attributed the oil prices drop to fewer miles driven in, Cost at pump dips as demand, oil prices fall,

Drivers in the USA logged 9.6 billion fewer miles in May than in May 2007, the government reported Monday. It was the third-largest monthly drop in 66 years.

But to me, that alone cannot account for the downturn in oil prices. If you look at the graph to the left, you see that oil prices started declining more steadily around the time the President announced he was removing the moratorium on offshore drilling. I believe if the Congress would approve domestic drilling, we would see more declines. 

If you look at the chart from this 2nd article, US drivers Log 9.6 B fewer miles in May, you see that Americans have been driving significantly less all year. May did not even mark the largest downturn, March did. If the price of oil was so dependent on driving alone, March's decline should have triggered a crude oil price reduction, shouldn't it have?

The data released Monday show that Americans drove 29.8 billion fewer miles in the first five months of this year compared with the same period last year, a 2.4% drop. The dip continues a seven-month trend beginning in November. Americans have driven 40.5 billion fewer miles from November through May compared with the same period a year earlier.

I believe we must start drilling in America if we want to see oil prices really decline. (Domestic drilling would also keep  billions of US $ at home, but that is another subject!) We are on a hair trigger as it stands now, where any natural or man-made disaster could push prices up. 

Unrest in non-OPEC countries, such as Nigeria, could push prices higher. Militants in that country sabotaged two oil pipelines Monday, driving crude prices for September delivery up $1.47 a barrel. A major hurricane in the Gulf of Mexico also could send oil prices higher.

"We could always have a spike to $150 a barrel," Smith says.

For right now, we can relax just a tiny bit and enjoy the typical price decrease of .40 to .50 cents/gallon in August. Too bad it is still .70 cents a gallon more ($1.19 nationwide) than last year!

*In 1979 gas prices were under 50 cents a gallon in the early summer! (Good thing.This was our 5 1/2 week, 8,000 mile Way Out West camping trip.)

Click here to sign the DRILL HERE. DRILL NOW. PAY LESS domestic drilling petition and see the latest links to related oil news (updated every day).

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Last week Michelle Obama did it again. She said something that revealed who she is and how out of touch she is with the average American's economic circumstances.

The Washington Times reported that each campaign needed to rein in their surrogates:

The same day a John McCain surrogate dismissed economic woes from a nation of "whiners," Barack Obama's wife quipped that the $600 tax stimulus check could be used for a pair of earrings.

I would not classify Michelle Obama in the same "surrogate" category as McCain's economic adviser Phil Gramm, however. McCain can dump Gramm, but Michelle Obama is part of the package. She will be First Lady if Obama is elected. Whenever she says something controversial, an image of her serving tea to an important dignitary while making "small talk" pops into my mind.

Mrs. Obama does not come across as a happy camper. I think the first time I heard her interviewed was last February when the Obamas were in town before our primary. She talked about how women struggled just to get through each day, and she included herself in that group. I was surprised by her remarks because they sounded like those of an unhappy wife.

Michelle mentioned the usual complaints: husbands go off to work and leave all the responsibility of home and children to the wife. She spoke about how she is the one who must take the kids to the doctor or stay home if they are ill, etc. At the time I thought she was not painting her husband in a very good light. To hear her talk, you would think they were impoverished and had no options to hire a baby sitter, helper, or housekeeper.

As the campaign continued, I found out the Obamas lived quite comfortably. Comfortable enough to think nothing of $600.  

"You're getting $600 - what can you do with that? Not to be ungrateful or anything, but maybe it pays down a bill, but it doesn't pay down every bill every month," she [Michelle] said. "The short-term quick fix kinda stuff sounds good, and it may even feel good that first month when you get that check, and then you go out and you buy a pair of earrings."

A reader's response to the Washington Times article summed it up well,

Someone who suggests spending the $600 rebate on earrings is not living the same way the rest of America lives.

We put our stimulus check in the bank, saving it to pay for our property taxes due in December. It required belt tightening now, but I am grateful we were able to do that. (Still wish we did not go down the stimulus road though.) 

Click here to sign the DRILL HERE. DRILL NOW. PAY LESS domestic drilling petition and see the latest links to related oil news (updated every day).

Drill Here is now over the 1.3 million mark. The goal is 3 million signatures by the Democratic and Republican Conventions. 

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Before we breezed out of town last weekend, I purchased some Edy's Slow Churned Ice Cream in what formerly was the half gallon size and tossed it in the basement freezer. (I know ice cream has not been 1/2 gallon for years. It is actually 7 cups.)

While away, my husband spotted a USA Today article he thought was blog worthy: Shoppers beware: Products shrink but prices stay the same It was all about how manufacturers are making the packages smaller but charging the same price as the former full size:

"Downsizing is nothing but a sneaky price increase," says Edgar Dworsky, former Massachusetts assistant attorney general in the Consumer Protection Division, now editor of Mouseprint.org, a consumer website. "I'm waiting to open a carton of eggs and see only 11."

The article showed Edgar Dworsky with a magnifying glass and some Breyers ice cream cartons in the new 1.5 quart size. If you aren't paying attention, it would be easy to mistake the 1 cup smaller packages for the former 1.75 quart sized cartons.

 "We did not in any way try to hide this," insists Tim Kahn, CEO of Dreyer's Grand Ice Cream, which also makes — and has shrunk — Edy's. "The package-size change couldn't be any more visible."

I didn't catch the Edy's reference at the time--hey, I was on vacation! But tonight when my men wanted some ice cream, I noticed the Edy's carton on the counter and said, "This is smaller than before, we got gypped like the article!"

I still paid the same price as the larger size but lost 1 cup of ice cream.

Sometimes manufacturers have the nerve to try to sell the idea of smaller sizes, spinning that it is for your convenience that the package is smaller because it is easier to carry!

Sure enough, my ice cream was the newer, smaller size. When I put it back in the kitchen freezer, I noticed that it fit in a place that wasn't tall enough before. Guess the smaller size was for my convenience. :)

Other products have shrunk too. Sugar is a good example. Sugar always came in 5 and 10 pound bags. Now you have to be careful. The name brand sugar often comes in 4 pound bags. Generic or store brand sugar usually comes in 5 pounders. (Aldi's sugar is 5 pounds for $1.79 if you were interested.)

Consumers just can't catch a break. We pay the same, if not more, for gas laced with ethanol for a 10% reduction in m.p.g., and now we pay the same price for a container that is 10% to 20% smaller than before!

Hmm, if only we could reduce the density at Percheron Square by 20%, but that is a subject for another day.

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Remember the billboards that said IT was coming in 2001? The IT was the Segway, a "two-wheeled self-balancing vehicle that runs on a rechargeable battery." Although Steve Jobs and others "predicted it would change the way people lived," the IT came and at the time, it wowed the public about as much as the Edsel.

But times have changed since 2001. Gasoline prices are now higher--a fill up for our minivan then cost $35, today it can cost $80. People are looking for alternatives.

Segway Glides as Gasoline Jumps the Wall Street Journal reports. Obviously, this is not the solution to high gas prices for Wisconsin residents, but the article mentioned a few Segway owners who thought Segways made sense. (Maybe I should say, cents.) 

Scott Hervey of Yorba Linda, Calif., bought one of the electric scooters on June 7 and has put 150 miles on it commuting to his custodian's job at Disneyland, about 12 miles away. He had considered buying a Segway for four years, and gasoline prices finally drove him to do it. Now he "glides," as Segway enthusiasts say, to work. "I like passing gas stations," says the 54-year-old.

Segway's cost around $5,000 each. The user must be fairly agile and willing to expose themselves to the elements--and neighborhoods. Then there is the question of, where do you ride it? Sidewalk or street? Some communities ban them from sidewalks.

We were at Disney World the first year the Segway was released, so we saw them in action. Both my husband and son wanted one.  For specific uses, especially in large factories or businesses, I can see where they would be handy, quiet, and because they emit no exhaust, can be used indoors. I'm not sure they are the perfect commuting vehicle though. But it seems some people would disagree:

Sales at the scooter's maker, Segway Inc., have risen to an all-time high, says CEO Jim Norrod. The closely held Manchester, N.H., company doesn't release detailed numbers. (A September 2006 recall showed the company had sold 23,500 Segways.) But Mr. Norrod says he expects sales this quarter to jump 50% from a year earlier, versus a 25% year-over-year increase in the first quarter.

Among the new customers are local governments and universities whose budgets have been pinched at the gas pump. New York's Syracuse University and the University of Kansas say they bought Segways for their campus police this year, in part because of rising gasoline prices.

As gas prices continue to climb, some people will be looking at creative ways to ease their pain at the pump. I would think those motorized bicycles that the police and parking lot security use would gain in popularity too. Maybe people will finally decide a 30 mile commute to work is not the best idea. (In that case, Brookfield real estate should become more attractive because we are so close to the city.) But for the gizmo-loving customer with a large wallet in a temperate climate, the Segway may finally have hit its stride.

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